The story of Shenzhen embodies the radical transformations that have seized China since its opening in 1978. During the 1990’s, this small fishermen village has first become the biggest manufacturing center of the “made in China”, producing low-quality goods for the rest of the world. 20 years later, it has now evolved into a giant distributed fabrication hub, producing original designs and new models for innovation.

From low-cost to high-end

Map of the Shenzhen region – From Wikipedia

With more than 12 millions habitants, the city is one of the hearth of small-scale and labor-intensive manufacturing activity in China. Garments, watches, furniture, jewelry, machinery, toy… are produced before being sold and shipped from Hong Kong, just a few kilometers away. This proximity with the biggest trading center in Asia has made Shenzhen the ideal location for equipment manufacturers (OEMs).

The declaration of the Shenzhen region as a tax-free Special Economic Zone (SEZ) has lower costs and higher flexibility of the production, leading to numerous relocation of foreign companies. To keep control on foreign newcomers, the local government has tried to increase the length of investment turnover and “embed large-scale foreign investment within big domestic firms and state-owned companies (SOEs)”1. The establishment of the Shenzhen Stock Exchange in 1990 made the Shenzhen area even more attractive, with more original design manufacturers (ODMs) starting to come, especially from Taiwan.

The rapid saturation of the local market of low-cost manufacturing leads to progressive turn towards more sophisticated products and the capability of designing and building products started to expand within the region. A lot of skills and knowledge were relocated and Shenzhen’s firms start gradually to compete not only on price but also on quality. Huge firms lead the shift towards a more creative industry in the software (Tencent) and electronics market (Huawei, ZTE, etc.) Small and medium enteprises (SMEs) have been following quickly, with large access to foreign and public investment. After years of working on others’ behalf, the wild manufacturing jungle from the 1990s has now developed into a highly specialized supply-chain for delivering quality goods, making Shenzhen one of the major metropolis in Southern Asia.

A deep culture of entrepreneurship

From the early 80s to our days, a very strong culture of entrepreneurship has built up the city. From 300.000 habitants in the 80s to more than 11 millions today, Chinese have been coming in masses to Shenzhen to “jump into the see” (下海) as Chinese people were saying back then. Meaning “to start a business”, it describes well the feeling of this time : jumping into an ocean of unknown dangers to seek better opportunities.

A recent TV drama called “相爱十年” features classmates from the post-80 generation (80后) arriving in Shenzhen to “make it”. Year after year, their living conditions improve gradually as they become sucessful businessmen.

From a very hard living in the communist danwei to a vibrant and agressive culture of world class business, Shenzhen embodies the “Chinese Dream”. Today, the city is so young that you can barely see any elders in the streets. Everybody works hard and some streets are so busy that you can literally see people running around.

The district of HuaQiang Bei in Shenzhen. Credits : shaff (cc)

The “Hollywood for Makers” is in China

The incredible pace of products release and the technological frenzy of the city has brought geeks and technophiles of all kind. Named the “Hollywood of Makers“, Shenzhen is now hosting a vibrant ecosystem of startups, creatives, developers and innovators. The encounter of the traditional manufacturing of cheap and conterfeit goods with the methods and discourse of the DIY culture has lead to the apparance of typical forms of creativity with Chinese characteristics.

Published by Seeed Studio, a Shenzhen-based open-hardware manufacturer, the Shenzhen Map for Makers is an English -language map for foreign tourists to reach places where electronics are traded, as well as incubators, hackerspaces, etc.

The open-source paradigm that fosters the renewal of a making culture worldwide in fablabs, hackerspaces and online platforms is meeting in Shenzhen with the long experience in workshop sharing, quick prototyping and reverse-engineering of the “shanzhai“ (山寨) manufacturers. Well-known to produce very cheap or even conterfeit goods, the so-called shanzhai industry in Shenzhen is actually made by huge clusters of small-size companies of independent constructors. Years after years, they have implemented an efficient and completely distributed system of knowledge exchange and on-demand supply that allows to release new versions of a product in the blink of an eye2 .

The know-how of decades of low-cost manufacturing organization is a very valuable asset for the open-hardware movement who seeks independance from the big constructors. The availability of manufacturing resources allow them to turn their community support into a real competitive advantage during the product development. A simple prototype that attracts attention can make the promess of delivery as soon as can it gathers basic fuding, often crowdfunding platforms.

On a wall of Seeed Studio office

Kickstarter has become the first step towards production, with teams in hackerspaces specialized in video promotion. Companies like Seeed Studio have succesfully become specialized in supplying services to support those emerging models. With his motto “Innovate with China”, Eric Pan and his team take care of all steps from the prototype to the final product : industrial design, production, packaging and drop-shipping right to the door of the customers.

Shortcutting the classic angel/VC investment process, the whole product cycle from the first idea to final sales is now cut down to 1-3 months, suggesting a whole range and scale for this new model emerging in China.

Today’s technologies of information (from mobile devices to online networks) and their uses are shaping new ways to build geographic spaces as social territories. Information and Communications Technologies (ICT) has also brought a new configuration for the economy of knowledge, where spaces and places can now be considered as “connected spaces of innovation”. Pursuing Castells’s works (1989) about informational cities, we want here to consider how particular organisations and places are structuring distributive forms of innovative practices.

In China, the pace of industrial growth has led to the appearance of the “shanzhai” culture, where geographical clusters of small-size companies of makers are manufacturing counterfeit goods or cheap imitation of international branded products – especially digital devices and electronics. This process of localized production has been adapting quickly to market changes, producing new forms of innovation and design for technology (Keane & Zhao, 2012).

Those physical spaces are also hubs for virtual social networks that distribute widely intelligence and knowledge through colleagues and members of the same industry. This distribution of design, organizational processes and operational practices has been largely mediated through ITC (information sharing, reverse engineering of technical schemas, rapid prototyping technics, etc.)

This blog wants to take inventory and analyze the models of emerging urban spaces that play or have played a synaptic role between virtual and physical worlds within new modes of “industrial organization” of innovation in China. We will focus on places, organizations and communities based on the following criterions:

distributed through new engineering practices and modus operandi – open bill, open date, agile management…; distributed through new forms of business models; distributed through new ways of managing skills and knowledge

What are the key features of organizations and communities that take part in a distributed innovation system?How do they relate to places and territories? How is knowledge produced and distributed in an ecosystem of innovation?

This research blog will investigate the field of China’s emerging economy to provide new understandings of models and practices of distributed innovation.